Annual report 2014 2015

Connecting not-for-profit communities across Australia through strategic procurement savings for our 18,000 + Members

annual report 2014/15

annual report 2014/15 3 Who We Are 4 Our Chair 5 Our CEO

IN 2014/15 MEMBERS USING CR

SOLUTIONS ENJOYED

SAVINGS

6 Our People

30%

7 Our Board

up to

8 Our Members

AND EFFICIENCY GAINS

9 Community Focus 14 Our Solutions 16 Our Faith Publications 18 Our Financial Results 19 Community Focus

WITH LOWER PRICES

who we are Procurement solutions by a not-for-profit organisation, for not-for-profit organisations.

Church Resources (CR) is one of Australia’s largest aggregated buying groups, enabling supply solutions exclusively for not-for-profit organisations.

Our Vision Church Resources is a not-for-profit organisation built on integrity and innovation, serving our Members and Readers as trusted experts in procurement solutions, and publications.

Our Values Respect - for each other, our Members, our Readers and our Partners Ethical – approach to business – we act in the best interests of our Members and our people Care – for individuals and organisations in all of our dealings Innovation – finding new and better ways to serve our Members Purpose – in what we do, our actions will add value and be motivated by our vision Enjoyment – in the service we provide to support the Mission of our Members

CR is here to help you: ÆÆ Find ways you can achieve consistent value on all goods and services ÆÆ Improve your buying processes with the efficiency of one-stop procurement, simplified reporting and consolidated delivery ÆÆ Access a huge range of leading brands at a competitive price that is usually reserved for large corporate organisations ÆÆ By providing friendly, specialist advice to make product sourcing easier, more efficient and better suited to your strategic needs ÆÆ Manage supplier relationships on your behalf so you can stay focused on achieving your core mission ÆÆ Optimise your procurement with free benchmarking and tender negotiation advice ÆÆ Minimise organisational risk with expert advice to secure the safest, best quality and best value products for your organisation

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our chair The process of change and continuous improvement has become part of “business as usual” at Church Resources, as it strives to be a more agile entity. Although not without challenge, it is necessary to meet the contemporary environment in which we and our Members work.

The product suite offered likewise continues to evolve reflecting the opportunities afforded by technology and the need of our diverse membership base to meet ever increasing demand for their services. Activity in the digital space saw the introduction of the online shopping portal, designed to both empower and enable Members to make the right purchasing decisions for them. The refugee programme, through which accommodation is fitted out for relocated refugee families, is one for which we expect there will be increasing demand.

We are most grateful for the support of Archbishop Hart, the Chair of the Australian Bishops Conference and the continuing support of Bishops Commission for Administration and Information. Bishop Hanna leaves as Chair of the Commission and we express to him our profound gratitude. He simply could not have been more helpful or willing to assist. We will miss him, but look forward to welcoming Bishop Tomlinson as the new Chair. Our thanks go to Father Brian Lucas, General Secretary of the Australian Bishops Conference for his continuing support.

Finally on behalf of the board, I thank our CEO Luke Kenny who, with his leadership team and staff, met with resilience the challenges of the year.

The worth of Church Resources to its Members goes well beyond the estimated $20m in annual savings. The organisation’s role as a trusted adviser is just as important. If Church Resources is unable to fulfil a need, we will advise how it could be achieved. That and the fact that we know and understand the not-for-profit sector is what differentiates us.

I would like to thank my fellow board members, Jim Burke, Stephen Elder, Peter Matthey, Francis Moore and Tim Smeallie for their assistance and commitment.

Julie-Anne Schafer Chair of the Board 4

our ceo Church Resources is a leader in the delivery of aggregated purchasing for the not-for-profit sector, and delivering faith-based publications. To become and remain a leader, we know we have to keep changing and evolving.

Most notable of our change has been the move to take up a leadership role for the Church and NFP sector in providing digital technology. In 2014/15 CR has expanded its capability, helping our Members take small steps to embrace the inevitable digital revolution.

Our new CR Voice & Data solution with Optus and the Ethan Group has meant we had to thank and farewell our long term supply partner in Telstra.

Many of our Church Members have expressed their concern as to why, and how we managed this process. Simply put, CR and Telstra could not secure the expanded offering we needed, and thankfully CR and Telstra professionally collaborated with you, our customer in mind, and only announced the change once we felt we had the set up the right support for our valued Members.

We as a business, and I personally, must thank our Chair, Ms Julie-Anne Schafer for her leadership and support. CR deeply values the support from the Australian Catholic Bishops Conference, and the Bishops on our Commission. With the recent elections we farewell a terrific Chair in Bishop Hanna, we welcome and congratulate Bishop Les Tomlinson who takes on the role for the next three years. We also welcome Bishop Gerard Holohan from Bunbury, WA to our commission.

In the last financial year we welcomed Mr Tim Smeallie to the Board. On behalf of all CR staff, we would like to thank our Board Members for their hard work and support in FY14/15.

Finally, our staff are our greatest asset. Completing this year had some incredible challenges. I am proud of how we serve our Members and Readers, so they are better informed, can make better decisions, and be better off.

CR continues to build momentum in taking the lead role in developing the procurement profession across the NFP sector. This has seen us introduce online buying for Members, a new employee benefits solution and soon we hope to expand to offer customised procurement training for Members.

During 2014/15, our faith-based publishing unit and the social media growth strategy via Facebook, grew from 5,000 ‘likes’ to 27,000 people ‘liking’ our content.

Luke Kenny Chief Executive Officer 5

our people CR recognises that our people are fundamental to our success, and seeks to ensure that staff have the appropriate skills and experience required to deliver against CR strategy.

CR’s focus on leadership development continued throughout the year, with twelve participants completing the first CR Leadership Development Program. The two year program was aligned to improve capability to effectively lead and manage people, and develop the career potential of staff.

Our Performance and Development Review process is designed to foster a culture of high performance, by providing staff with a clear link between their work effort and organisational priorities. All staff have an individual performance assessment annually, and performance is monitored regularly throughout the year.

We recognise not only performance, but the behaviours that our staff bring to our business.

We celebrate and reward staff whose behaviours align to our core values of respect, ethics, care, innovation, purpose and enjoyment.

The CR Social Club works hard to maintain a positive, collaborative and social workplace environment. The Club takes the lead in organising all internal events. It also supports charities and community events, including fundraising for worthwhile causes such as Steptember (Cerebral Palsy Alliance), Australia’s Biggest Morning Tea (Cancer Council), Christmas Hampers (Josephite Community Aid) and Wild Onsie Week (World Wildlife Fund).

CR actively seeks the regular feedback of our people through the annual Employee Survey.

This year saw pleasing results, with 84% engagement across the workforce.

Betty Chiu EOFY Social Club Event

Michelle Despas Manager, Human Resources 6

our board

Julie-Anne Schafer Chair of the Board

Jim Burke

Stephen Elder

Julie-Anne Schafer is an experienced non-executive director across several sectors including financial services, health & transport. A former Telstra Queensland Business Women’s award winner, President of the Queensland Law Society, Chair of the Solicitors Board of QLD & Deputy Chancellor of the QLD University of Technology, she has chaired the RACQ and RACQ Insurance Boards & was previously a commercial & insurance lawyer.

Jim Burke joined the CR Board in June 2013. He has worked in the computing & financial services industry & has performed a variety of business & technology roles including serving as Chief Information Officer for Westpac’s Institutional Bank & Portfolio Director of a large integrated program of work undertaken by the Working Capital & Trade Solutions payments division.

Stephen Elder is the Executive Director of Catholic Education in the Archdiocese of Melbourne, Executive Director of the Catholic Education Commission of VIC & a Commissioner of the National Catholic Education Commission. Stephen was a member of the Victorian Parliament from 19881999, & was Parliamentary Secretary for Education 1993-1999.

Francis Moore

Francis Moore has acted as a legal advisor to Church agencies, commercial & NFP clients. As the Executive Director, Administration for Archdiocese of Melbourne, he is responsible for advising the Archbishop about financial affairs.

The Deputy Chair of the Catholic Education Commission of Victoria & the Catholic Development Fund of the Archdiocese of Melbourne, also the founding Chair and a Director of Catholic Network Australia.

Peter Matthey

Peter Matthey is a retired chartered accountant with 38 years of experience in public accounting. He was previously a partner at KPMG and a director of KPMG Transaction Services. He now contracts privately in his areas of specialisation. Peter is Chairman of Cabrini Health Limited and on a number of committees; he is also a director of Catholic Network.

Tim Smeallie

Tim has over 20 years of telecommunications experience & was the Head of Commercial Strategy at NBN Co Limited (the corporation mandated to build a $36bn national broadband network).

Tim has held a wide range of financial and strategic roles throughout his career with British Telecom, AAPT, Coopers & Lybrand and is currently the principal of Numerico Advisory.

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our members Every year CR surveys its Members to seek and understand their satisfaction with our performance. We wish to acknowledge and thank Members that take the time to respond to the survey.

We would like to share with you some of the key findings of the 2014/2015 Member Survey: ÆÆ 80% of CR Members said they would recommend CR to other organisations ÆÆ 85% of our Members confirmed CR strives to deliver good to excellent service

From the Members that responded, overall, the results indicate that we are performing at a level that is acceptable but not at a level that is exceptional, in essence we have work to do to deliver a much better and holistic service to our Members.

On behalf of the entire Member Services Team we thank you, our Members, for your support throughout 2014/15 and you have our commitment that we will continue to strive to deliver service that meets or exceeds your expectations.

ÆÆ 61% of our Members agreed that it has always been the long term mission of CR to help all not for profit organisations ÆÆ 64% of our Members agreed CR’s purpose is to provide maximum benefits to its Members because it also is a not-for-profit organisation ÆÆ 61% of Members stated CR provides access to a good range of products and services ÆÆ 64% of Member confirmed Membership of CR is beneficial to their organisation

Don Milligan General Manager, Member Services 8

community focus: Mater Hospital The Mater Health Services North Queensland is an existing CR Member who has utilised CR’s exclusive Energy Solution for over 5 years through NUS Consulting. Mater Health Services North Queensland has a significant spend through our Energy Solution. This Member highlights how CR and its supply partners constantly work with Members in our after-sales program to ensure promised value is realised.

The Member challenge was a bill received by the Mater Health Services North Queensland, from their energy retailer. The bill was for $870,000 and immediately considered excessive by the Member in comparison to expected energy consumption patterns. CR’s energy consultants NUS took the opportunity to review the bill and investigate the charges. The result shows that during the billing period the retailer had failed to meter the supply, but instead (as is commonly done) applied historical energy consumption data to the bill.

chillers, before the billing period. As the energy charges for the Mater Health Services were based on the previous year’s consumption, the reduction in usage delivered by the new equipment had not been taken into account.

The result was NUS Consulting successfully and amicably working with the energy retailer on behalf of Mater Health Services North Queensland to have the bill reduced by $146,800, and for the outstanding amount to be paid in 3 monthly instalments to support Mater Health Services cash-flow.

The benefit to Mater Hospital highlights a core value proposition provided by CR procurement, the importance of ‘cost avoidance’ (along with price discount and process efficiency). CR’s work is ensuring the mission of our Members is not being disrupted and impeded by having to pay for services unnecessarily.

Gerard Wyvill, CEO Mater Health Services North Queensland states: “I am pleased with the outcome as well as the service provided by CR and NUS Consulting”.

NUS Consulting provided evidence to demonstrate that the estimated energy consumption was too high, citing that the hospital had recently upgraded to new and energy efficient

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community focus Settlement Services International (SSI) is a notfor-profit organisation providing a range of services in the areas of humanitarian settlement, accommodation, asylum seeker assistance, multicultural foster care and disability support in NSW. Formed in 2000, SSI is also the state-wide umbrella organisation for 11 Migrant Resource Centres and Multicultural Services across NSW.

SSI is the leading not-for-profit humanitarian settlement organisation in Australia, supporting more than 10,000 clients per year on refugee and bridging visas.

In 2013 Church Resources (CR) and SSI entered into a contract to support the ‘Basic Household Goods Program’ for refugees and asylum seekers resettling in Australia. CR was well aware that not only would we be a supplier providing a range of

Onni Samdani and Alan Salameh

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Settlement Services International quality whitegoods, electrical items, furniture and general household goods at a reasonable price; we would also be ambassadors for SSI in meeting the needs of refugees looking to start a new life in Australia.

It was incumbent on CR to learn, understand and orient our staff and those of our sub-contract suppliers on how to meet the needs of a culturally diverse group of families whose life experiences to date, had all been negative.

On the 2nd April, 2015 due to some logistic and traffic issues, CR was advised by its logistics providers they were unable to complete the delivery of six orders to SSI’s Client families. As the 3rd of April was Good Friday, this would mean these families would be without furniture and household goods for the four days over a longweekend holiday.

“I have travelled to the Middle-East and other parts of the world where I have seen the plight of families such as the ones supported by SSI and CR in Australia. As I truly value the work CR is doing with all not-for-profits who are Members and in particular this Program with SSI, I knew that in some small way I was helping make the lives of other families that little bit easier and happier.”

“Like CR, our commitment does not finish with just supply and savings, it finishes with understanding and helping CR’s Members achieve outstanding outcomes for the families and clients their Members support.”

The commitment of CR’s staff and that of our partners, including NPC, is what makes CR a leading provider of solutions to our thousands of Members.

However, understanding the impact non-fulfilment would have on the families, CR’s Program Administration Coordinator, Onni Samdani, swung into action and, with National Property Coordination (NPC), explored how we could assist with additional trucks. Onni arranged a special pick-up and delivery to be made by NPC overnight and throughout the morning of Good Friday.

When asked why NPC was prepared to assist these families during a holiday period and at no additional cost to the program, Alan Salameh said,

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community focus: Schizophrenia Fellowship The Schizophrenia Fellowship is a not-for-profit community based organisation working in the field of mental illness. They are committed to improving the circumstances and welfare of people living with a mental illness, their relatives and carers, and professionals working in the area.

Church Resources (CR) worked with Debra McCahon, the Procurement and Infrastructure Manager at the Schizophrenia Fellowship in NSW. With 25 years’ experience in procurement, Debra started her career at the Department of Defence and has specialised in procurement across government, private sector, corporate and not-forprofit organisations.

For Debra, the Fellowship allows her to do what she’s best at: “I love working in the not-for-profit sector”, Debra remarked, “As I’m a humanitarian at heart and also a businesswoman. Working for not-for-profits in a business capacity enables me to give the 360 of who I am, not just a half. It’s very congruent with my being.”

“CR always enables the most effective help. When coming across other not-for-profits, I always suggest they ring CR and discuss the various possibilities. The service is great. It’s more like a partner arrangement,” Debra shares.

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CR evaluated the Fellowship’s telecommunications and delivered a cost analysis for Debra to present to the Executive Board. In this particular case, the analysis highlighted a saving of 60% per annum.

The Fellowship transitioned their mobile fleet across 250 employees and 50 sites. “Together with CR we established a working group and executed a project plan”, she highlights.

Another innovation from CR is Fellowship staff now get new computers in eight days, and no longer have to wait three months. CR arranges to have the Standard Operating Environment already installed prior to delivery. This initiative has delivered both process efficiencies and cost savings to the Fellowship equivalent to an annual wage.

community focus: Endeavour Foundation Endeavour Foundation is an independent notfor-profit organisation supporting more than 3,300 people with a disability from more than 230 locations in Queensland, New South Wales, Victoria and South Australia.

The Foundation is one of Queensland’s oldest charities and is now a diverse community organisation providing person-centered support for people with a disability within the everyday community. Through education, training and lifeskill development, employment, accommodation support, respite and recreation, Endeavour Foundation is one of Australia’s leading providers of service and real life outcomes for the people they support.

One of Endeavour Foundation’s primary business goals is to be an environmentally conscious and sustainable organisation. In 2014, they went to the market with a tender to find a suitable supplier that would be able to assist source a range of whitegoods, electrical items and general household goods; not only meeting the needs of the people they support but could also be delivered at a cost that reflected best-practise procurement and importantly, had power saving attributes.

The key challenges for this project were: 1.

The large geographical footprint over

which Endeavour Foundation operates.

2.

How to manage the approval process.

3.

How to obtain centralised supply to

maximise cost savings.

4.

Deliver ongoing sustainability

management by purchasing energy

efficient products.

Church Resources were able to meet the specific requirements of the program, and are on the journey to streamlining supply across the Endeavour Foundation, working as an extension of the team.

David Barbagallo, Chief Executive Officer Endeavour Foundations states, “As a charity, we are thankful and committed to CR for the development of such innovative solutions and grateful that ongoing savings can be directed back to our service delivery and the people we support”.

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our solutions The 1st July, 2014 saw the old Strategic Partnerships Department structure merged with the Marketing Department to create Brand & Product Development.

The decision to merge the two departments was to more closely align the products, services and people of our Partners, to that of our supply chain and marketing activities.

The merge brought about a new era of analysing and understanding what both our Partners and Members thought of Church Resources and our Brand.

Mark Hopcroft General Manager, Brand and Product Development 14

Rather than attempting to assess this internally, well-known brand auditors, MarketingHQ, were engaged to provide us with in-depth feedback from a wide range of stakeholders, including the Church, our Partners, our Members, and our staff, thereby building a valuable profile of what has been working well and what has not been working so well.

From the brand audit, CR has now developed a new look and feel for the future. Our brand identity is about building a CR not-for-profit community across the Education, Welfare, Aged Care, Church and Health sectors and achieving procurement savings that assist in everyday outcomes for the people they support.

Our goal to be a key driver of innovation across the supply chain for not-for-profit organisations also saw significant changes in our Partner arrangements and processes.

One of the main changes was the decision in September 2014 to transition our telecommunications offer from our long-standing partner, Telstra, to a panel of providers, including

Optus, Ethan Group and others, who now offers a full ICT suite of products (not just telephones) across the entire not-for-profit sector.

The ‘CR Voice & Data’ brand has been established as a benchmark in Telecommunications, IT, Managed Services and Cloud offering to any large or small not-for-profit. This is a significant shift in service delivery, price and product availability on an aggregated basis to all our CR Members.

The transition from our long standing CR rebate model to a blended rebate and direct sale model continues to show growth, with CR now accredited as Preferred Supplier by a number of key Members.

The direct sales model is rapidly evolving into a competitive online procurement program that is now starting to allow our Members’ staff (through the My Benefits Program) access significant personal savings on goods and services. This evolution is simply born from our personal knowledge as a not-for-profit, like our Members, as to the many benefits staff in the not-for-profit sector forego compared to corporate Australia.

Now fully integrated as one, the Brand & Product Development department is working towards delivering outcomes to our Members and Partners which reflect the core values of CR in all ways.

As our social media hashtags #strengthinnumbers and #outstandingexperience suggest, our goals are to reach higher and deliver better to our Members over the next fifteen years of CR service delivery.

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our faith publications Another milestone year for Church Resources Publishing in 2014/2015 as we hit new heights in terms of the audience for the publications themselves, and on social media.

In this financial year, we reached nearly 400,000 users for our masthead publications, CathNews and CathNews Perspectives. On social media, we hit a new high of around 18 million post reaches on Facebook, both at the beginning of Lent, and again in early June – that meant 1.1 million post clicks.

That was how we ended the year. The team started it by running in the new Catholic Australia website, tweaking its performance and capabilities through July and August. Now, the Catholic Australia audience is serviced with a monthly online newsletter.

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In September, the CR Publishing team again enjoyed peer-acclaim, this time with wins at both the Australasian Catholic Press Association (ACPA) and the Australasian Religious Press Association (ARPA) awards in Canberra in September.

At the Australasian Catholic Press Association Awards, CathNews Perspectives was described as “most pleasing, clean and modern” and was highly commended in the Best Online Publication category. CathNews was the Online Publication Winner for Best Layout and Design.

In the Best Advertising Feature/Supplement CathNews Perspectives was Highly Commended for our special editions to commemorate the historic canonisations of the two Popes, John XXIII and John Paul II.

In March, CathNews Perspectives again published five special editions, this time to mark the second anniversary of the election of Pope Francis to the See of St Peter. And there was another special edition of CathNews Perspectives to mark the launch of Laudato Si’: On the Care of Our Common Home, the first Encyclical of Francis’ Pontificate.

In April, May, and June, Church Resources and CathNews partnered with Catholic Religious Australia, Australian Catholic University, and Catholic Church Insurance, to present three very special evening in Sydney, Melbourne, and Brisbane.

The Evenings for Consecrated Life supported the Pope’s nomination as 2014 as the Year of Consecrated Life. We gathered expert panels of 12 religious and consecrated lay people from various charisms on ACU campuses on the eastern seaboard to understand what their experience of that life had been. They were powerful witnesses to faith, and their generosity in sharing with our CathNew Subscribers and Readers was really appreciated by the audiences.

During the year, there was a continued focus on social media – our Facebook page (4,500 “likes” in the last report) exceeded 27,000 “likes” at the end of this financial year.

CR Publishing social media’s focus was on our Internet Protocol TV platform (IPTV), CathNews on YouTube. This is the home for our daily Mass on Demand from St Mary’s in North Sydney, and is the cornerstone of the service, which also includes uploaded, as well as embedded, videos from around the country and the world. facebook.com/cathnews facebook.com/bulletinnotes twitter.com/cathnews youtube.com/cathnews

Christine Hogan Publisher 17

our financial results CR continues its journey towards the direct sales model. Revenue from direct sales was 54% of total sales in FY14/15, a growth of more than 50% on last year.

The table below reflects the product mix for our Members from both the rebate and direct sales categories.

Apple and the Community Housing program are our most sought after product lines in our direct sales model.

The surplus we have made will be reinvested into activities to support our Members and the wider community.

Colleen Sorbello General Manager, Finance & IT 18

community focus: Save the Children Save the Children is one of Australia’s largest aid and development agencies dedicated to helping children. They work hard to protect children from harm and help them access quality education and health services.

With more than 90 years’ experience working with children, they are at the forefront of saving children’s lives when disasters strike and create lasting change for children and their families through their long-term development programs.

They have programs in 29 countries, including Australia, where they work in every state and the Northern Territory.

With Save the Children helping children around Australia and the world, they need to travel and are able to benefit from the CR Travel Solution.

This includes savings on air fares and most importantly, having a dedicated travel team sharing the vision to help as many children as possible.

CR’s aggregated travel solution with FCm provides Save the Children and all CR Members access to discounts, consistent value and greater efficiency, this is in addition to our reliable, safe and secure travel solutions.

All CR Members together provide a significant volume of spend which allows CR to negotiate and pass on better discounts and service to the entire not-for-profit sector during 2014/2015.

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cr.org.au 1300 248 724 ABN 61 810 823 919 Mailing PO Box 1522 Crows Nest NSW 1585 Head Office Level 4, 504 Pacific Hwy St Leonards NSW 2065 Victoria 383 Albert Street East Melbourne VIC 3002 Queensland Level 3, 143 Edward Street Brisbane QLD 4000 Western Australia 40a Mary Street Highgate WA 6003